U.S. Auto Sales Decline Again | Stocks to Trade July 5-2017

U.S. Auto Sales

U.S. Auto Sales Decline Again

Auto Sales Fall Again As Car Demand Dives, But GM, Ford Shares Rally

U.S. auto sales declined about 3% in June vs. year earlier according to preliminary estimates, with the major automakers posting their sixth consecutive month of flat or falling sales in as many months this year. The latest monthly sales figures confirm views of a slowdown in 2017 as a glut of off-lease vehicles weigh on new vehicle sales.

Autoplay: On | OffWhile General Motors (GM), Ford Motor (F) and Fiat Chrysler (FCAU) reported sharply lower sales last month vs. June 2016, Japanese automakers Honda Motor (HMC), Toyota Motor (TM) and Nissan Motor (NSANY) saw stronger sales.


Ford and Fiat Chrysler sales fall less than expected, GM misses

US auto sales rose less than forecast in June, extending a soft patch that’s characterized this year. Sales rose at a seasonally adjusted annual rate of 16.51 million, CNBC reported. Sales fell 13.2% year-on-year, Autodata said. Economists had forecast that total vehicle sales rose at a seasonally adjusted annual rate of 16.58 million, according to Bloomberg.

Auto sales have slowed every month this year following seven straight years of record-setting volumes. And this suggests that the market has plateaued for now.


Can U.S. Auto Sales Recover in the Second Half of 2017?

U.S. auto sales declined for the fourth successive month in June, coming in below most analysts’ estimates. Substantial discounts and easier loans failed to entice a greater number of consumers.

This stretch of declines has lead to speculation that sales in 2017 will be unable to match up to last year’s record showing. But shares of automobile companies gained on Monday since consumer retail sales continued to sport stability.


F-Ford Stock Chart 7-5-17

F-Ford Stock Chart 7-5-17

Today's Trading Lesson

Chart Reading: The Problems and Limitations

Chart readers never fully grasp what they see which is why they never get past break-even. They go in circles for years looking for an answer that’s staring them in the face.

Chart reading is analysis. Tape reading is the money.

In the long-run, our edge is order flow but in the short-term stocks trade around saturation points. Areas where you can expect buying or selling to start or stop.

The closer your stock gets to a saturation point, you shouldn’t add more shares. The likelihood of follow through is lower, so you don’t add. It’s still a good long because you’re trading with the order flow, but it’s more of a cash flow play.

So we’re trading with the order flow, but trading around saturation points. I only add when my stocks are close to the value areas. If you can’t see these points on the tape, you’ll end up making too many break-even trades.. Break-even trades make break-even traders.

This is why a lower open in a strong stock is a great play. The opening price action is further from the saturation point, so your profit potential increases.

It sounds like you added to a stock later in the cycle… You shouldn’t have added. You need to know your saturation points to set the trade expectation. A good place to start is with your stock’s average true range.

The big picture was starting to get clear…

On the Tape Today | 7-5-17

GS-Goldman Sachs Chart 7-5-17

GS-Goldman Sachs Chart 7-5-17

The financials stock have perked up recently and Goldman Sachs appears ready to join the party. With higher lows and a test of resistance, I am game planning a breakout and new swing trade. Looking for a $230.50 buy stop to trigger the entry.

Massive room to go, but my initial target is $242.50. A conservative entry would be to wait for a close on the daily chart above the buy-stop level.


SPY ETF 60 Minute Chart 7-5-17

SPY ETF 60 Minute Chart 7-5-17

Stock Trading Game Plan

The short trading week will tell us if the short-term selling was simply a holiday, profit-taking or short selling.

You can see on the 60 minute chart of the SPY ETF that lower highs have formed, and price closed below the $242.50 level. Personally I am not reading too much into it, mostly because of the extended trading range. When price action is muted we tend to give greater significance to anything, instead of waiting for something important.

So that begs the question… “What’s important?” Well — we need/want to see momentum with volume. At least that type of tape tells us institutions sustained order flow – for more than one day. The key event comes when 3-5 days of momentum holds the new level.

This moment becomes the transition from short-term to a commitment. Remember real moves happen when institutions make a real commitment. Stay tuned.

Stock Market Today: Industry Performance

Stock Market Industry Performance on July 3 2017 by finviz.com

Stock Market Industry Performance on July 3 2017 by finviz.com

Stocks to Trade | 7-5-17 Wednesday Edition


Bullish Momentum: SM, AA, COP, LB, APA, HP

Bearish Momentum: qdc, nvda, exas, mu, atvi, adi, nflx, adbe, mchp, fb, xlnx, lrcx, pypl, avgo, jd




Bearish Order Flow: khc, tjx, dltr, tgt, rost, clr, apc, hds, slb, bbby, fl

Double Normal Volume: CARA, EQT

Inside Day: nke, jd, mat, gild, rrc, wba, cat, pep, gis, stx, esrx, celg, phm, coh, trip, nwl, yelp

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